ABA Ethics Opinion Says Clients May Waive Objections to Future Conflicts of Interest
Posted Aug 28, 2005 1:57 PM CDT
By Eileen Libby
Revisions to the ABA Model Rules of Professional Conduct give lawyers more latitude to seek conflicts waivers from clients.
That is the conclusion reached by the ABA Standing Committee on Ethics and Professional Responsibility in its Formal Opinion 05-436 (May 11) interpreting the scope of Model Rule 1.7 (Conflict of Interest: Current Clients).
The specific question addressed in Opinion 05-436 is whether Model Rule 1.7 allows a lawyer to obtain a client’s informed consent, or waiver, to conflicts that may arise in the future, even if those conflicts cannot be specified at the time the client’s waiver is requested.
This is the second time in a little more than a decade that the ethics committee has considered future conflicts of interest in the context of Model Rule 1.7. (The Model Rules serve as the basis for most state ethics codes for lawyers.)
Both times, the committee concluded that the rule gives a lawyer some leeway to obtain a client’s consent to a future conflict of interest. But the committee’s Opinion 05-436, issued in May, specifically interprets the issue in light of the 2002 revisions to Model Rule 1.7.
As revised, Model Rule 1.7 “permits informed consent to a wider range of future conflicts than would have been possible under the Model Rules prior to their amendment,” states Opinion 05-436, which withdraws the committee’s earlier opinion.
Prior to the revisions, the ethics committee issued Formal Opinion 93-372 (April 16, 1993), in which it expressed a “guarded view” of such arrangements out of concerns that a client might not be truly informed about potential conflicts. As a result, that opinion concluded that the effectiveness of a client’s “consent after consultation” is generally limited to circumstances in which the lawyer identifies the potential party or class of parties that may be represented in the future matter(s).
Filling in the Gaps
But now, says the committee in opinion 05-436, model Rule 1.7 provides more guidance on when a client may waive objections to future conflicts because the 2002 revisions address two key issues: first, whether a client gave informed consent to the conflicts; and second, whether the client’s consent should be limited to conflicts unrelated to the matter on which the lawyer is currently representing the client.
The 2002 revisions added language to Model Rule 1.7 directing that a client must give “informed consent, confirmed in writing” to a conflict of interest.
The revisions also shed more light on what constitutes an “unrelated matter” for which a lawyer may seek a client’s informed consent to a conflict.
That discussion is set forth in a new Comment 22 that was added to Model Rule 1.7 as part of the 2002 revisions. The comment states that the effectiveness of a future conflicts waiver generally is determined by the extent to which a client reasonably understands the material risks that the waiver entails. The level of understanding necessary to consent to such a waiver is more likely to exist, states Comment 22, when the client is an experienced user of the legal services involved, is reasonably informed regarding the risk that a conflict may arise, is independently represented by other counsel in giving consent, and gives consent “limited to future conflicts unrelated to the subject of the representation.”
In Opinion 05-436, the ethics committee says matters unrelated to the subject of the representation are those that cannot be defined as “substantially related” under comment language in Model Rule 1.9 (Duties to Former Clients). That comment defines matters as substantially related “if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.”
A lawyer sorting through the complexities of waiving future conflicts may be tempted to ask a question not covered in the ethics rules: Is it really worth the trouble to take on a case that raises these concerns?
Eileen Libby is associate ethics counsel for the ABA Center for Professional Responsibility.